Electra Battery Materials Corporation (ELBM) on Q4 2022 Results - Earnings Call Transcript
Operator: Thank you for standing by. This is the conference operator. Welcome to the Electra Fourth Quarter and Year-end 2022 Results Conference Call. I would now like to turn the conference over to Joe Racanelli, Vice President, Investor Relations with Electra. Please go ahead.
Joe Racanelli: Thank you, Ariel, and good morning, everyone, and thank you for joining us today. As you know, we filed our Q4 and year-end results last night, and we have all our materials available both on our website as well as SEDAR. There were a couple of developments beyond our control that took place and that resulted in a couple of days delay, but we are moving forward. With me today is Trent Mell, our CEO; our CFO, Craig Cunningham; as well as Mark Trevisiol, who is at the refinery site this morning and will provide an update both with the status of our construction project in our black mass. We will be following a presentation this morning that is available from our website. I encourage you to follow along. At the end of our management discussion, we will have a Q&A and we will open up those questions to the research analysts who do cover us for investors who do have specific questions, please reach out, and we will be able to answer them going forward. So thank you. And I will hand it over to Trent for his opening remarks.
Trent Mell: Thanks, Joe. Good morning, everybody. Thanks for joining us today. Before we go to analysts and open it up for calls, we are going to give you just a quick overview of development into Q4 and close off by sharing some of our near-term priorities and what our focus is going to be into Q1 and 2023 and beyond. Fourth quarter for Electra was particularly busy for us. And I guess the highlight for me, capping off the year with the commencement of our black mass trial just before Christmas kind of step one of our proof partner and build strategy, and I think it's paying off. And when I talk about the black mass trial for us, what that means is using our hydrometallurgical refinery and the process we've developed over the last 2 years to take shredded battery black mass as we call it and refined it into its consistent elements, and Mark will give you an update on that. Equally important for us this year as well, which is the progress we are making towards the commissioning of our cobalt sulfate refinery on its same location north of Toronto, and we will talk about that. Q4, you can see other developments there. We raised some money in November, difficult markets to be sure, over the last 6 to 8 months, but we got that done. And then over in our Idaho with our team, we acquired the Cat project. So that's a target copper -- cobalt target that's adjacent to our Iron Creek resource and to the Ruby target that was prominent this year with drilling. And I should highlight as well we filed a new resource estimate with a very large increase in the copper endowment for our Idaho project. So I think, Q4, overall, very considerable progress for a company of our size. I think it's reflective of the commitment of all our employees. And I want to thank everybody for the hard work that we did throughout the year and that continues into this year. It reinforces our first mover advantage and really positions us well for the future. So I'm going to pause there. I'm going to turn it over to Craig, and I will come back at the end of the call.
Craig Cunningham: Good morning, everyone. Thanks for joining. I'd like to begin my remarks with a brief discussion on our earnings per share. Although we are pre-revenue, we did have a positive earnings per share for the quarter of $0.31. That is primarily driven by a fair value gain on our derivative liability connected to our convertible debt of $10.3 million. That's driven by a decline in the company's share price from the inception of that instrument as well as a reversal of US$1.3 million -- CAD1.3 million rather on impairment reversals related to the sale of the Cobalt Camp properties that we completed in a transfer to Kuya Silver. Looking at Slide 6, our cash position for the end of the year, we held $8.4 million in cash and marketable securities. This is down from $19.7 million at September 30. Primary drivers of this are the continued investments and deployment of capital into the refinery project as well as $1.4 million in engineering and metallurgical studies, $800,000 related to D&O insurance, implementation of our ERP and exploration and development work at Iron Creek. The total additions to the capital for the refinery project in 2022 was $71 million. This is before capitalized borrowing costs. I'd also like to point out that our cash balance at the end of Q4 did not include $5.1 million of our government investments that we expect to receive under existing agreements as well as the US$14 million net proceeds from our convertible financing completed in February. Cash management is going to be -- continue to be a key priority for the company as we near the completion and look forward to the completion of the rebaselining engineering report that we announced in February. That report will give us an updated understanding of the required capital to complete that refinery project. Turning to Slide 7, further on cash management. We did complete a refinancing of our convertible debt in February, and what this allowed us to do was to hire our existing convertible debt, increase that facility to US$51 million, settle the remaining, I would say, $36 million which allowed us about $14 million in net proceeds. A few other key terms to that agreement was reaching a lower minimum cash balance required under the facility of US$2 million. This is down from US$7.5 million in the 2022 notes as well as allowed the company to turn its first year principal interest payments to shares, allowing us to further conserve cash. And some of the features are summarized on Page 7, including an early conversion of the second year anniversary if the share price was to exceed the conversion price by 150%. The terms and structure of the debt financing are indicative of the environment in the market that we are currently facing, but the company was able to achieve several cash conservation measures, which were important to our strategy. Moving forward to Slide 8, an update on our guidance. As noted on February 14, the company withdrew its guidance related to forward looking estimates and statements around the completion of the refinery project. These were as a result of continued supply chain issues as well as received with damaged equipment. We, as mentioned, are currently completing our baseline engineering report. That will help us update the project scope, scheduling and expected capital required to complete. The rebaselining work is being performed by electro engineers as well as our third-party EPCM. We would anticipate that the study is completed in Q2 in the coming weeks. And in addition to our original process, we will be also having the study looked at by a third-party estimator to give us additional assurances. The inflationary price pressures over the last year that have negatively impacted the number of the refinery project elements, including contractor labor rates, cost for raw materials, being steel and piping and delay costs, the company does expect that the final estimated capital will be higher than what had previously been guided and since moved that was CAD 105 million. We look forward to providing updates on the refinery project time lines and those capital requirements in the near future. That concludes my remarks. I will be turning over to Mark Trevisiol to give a refinery update.
Mark Trevisiol: Okay. Well, thank you, Craig, and good morning, everyone. On Slide 10, just to highlight some of the progress that we've made at the refinery over the last number of months. We've commissioned our lab. That's our metallurgical lab. In the lab, we've bought several pieces of new analytical chemistry equipment, and they're all working and actually putting us at the forefront in technology in terms of assay results for our black mass system. We've also commissioned the feed material handling system, the lead circuit, several filter presses and all the reagent handling systems have been commissioned. Approximately 95% of the procurement is completed. We've also completed the erection of our solvent extraction building. 100% of our cobalt sulfate loadout facility is completed. That's the building that will be housing our final cobalt sulfate product. The team at the site now consists of 31 personnel. We have electricians and mill rates engineers, support staff. And we are currently working a two-shift schedule on the black mass at the site to produce black mass. And talk a bit about our health and safety culture, we've had 0 lost time incidents at site this year, and we have also had 0 lost time incidents and 0 medical aids all of last year. So the trend is a very nice one that we like to see both as a manager and obviously, as an individual on the floor working. It's a great culture that we are developing there. and we are very proud that we've achieved these results. The next slide shows the site in June 2021, what it looked like in June 2021. And the time capsule moving forward on to Slide 11 would show the December 2022 outlook of the refinery and the new solvent extraction facility. If you go on to Slide 13, there's a plant view showing the solvent extraction plant leaching and neutralization circuits. I mentioned the final product storage. That's our sulfate storage facility, the crystallizer. And then on the left side, our existing maintenance shop, storage and feed preparation area and then our metallurgical lab just in the front of the facility. Construction update, Slide 14. We continue to receive deliveries of long-lead equipment. We reported the receipt of equipment that was damaged en route to the refinery. We have completed a thorough inspection and have determined that the equipment is suitable for installation, and we will have to complete some repairs on site before the -- film evaporator vessel can be commissioned. That's the vessel that was damaged. Over the last month, we continue to accept delivery of long-lead equipment, some solvent extraction sales through Q1. The bag unloading facility has also been received and the steel for the main pipe rack has also been received. We have a number of solvent extraction tanks which are still en route from their manufacturing country of India. So we will be receiving now those sales in June. And I would like to highlight that the original delivery of those cells was supposed to be back in October. So there's a significant delay to getting them here. And we are not immune to the worldwide computer chip issue. We've had a number of suppliers delay their shipments of equipment because of lack of microprocessors. And specifically in the microprocessor is the chip that controls the microprocessor. We had the filter units from one of our suppliers was supposed to be on site early this year, and the date was pushed back now again to June of 2023. As Craig indicated, we expect to have an updated project time line and capital spend requirements over the coming weeks, pending the completion of the rebaseline engineering report. I will move now into black mass. The black mass recycling. So we are targeting the high value metals that are contained in recycled and shredded lithium-ion batteries. The residue that is within the batteries contains nickel, cobalt, lithium, copper and graphite, and we recover all of these. We are making currently a nickel MHP product, graphite product, lithium carbonate product. And early on, we also make a manganese product. The keys to recovery are through our hydrometallurgical process. We also like to reinforce that we are -- this is a very low carbon footprint process versus some other processes that are currently out in the market and are recycling lithium-ion batteries. On to Slide 17. We launched our trial in December of 2022. Again, we are using proprietary hydrometallurgical process. We developed this over a series of testing on bench scale. And again, we are targeting the high-value metals for resale and the critical success factors for our trial, obviously, the recovery rates and production rates and how effective our overall process is. I mean I'd like to maybe stop there for just a second and talk about what we've seen in bench scale versus what we've seen in plant scale. There are several steps in our process right now where we are actually achieving better efficiencies in the plant scale than what we've seen in the bench scale. So we are very proud of that. and we will continue to make improvements to our overall efficiencies as we continue to run the black mass through the plant. We are targeting some areas that are perhaps not as effective as what we'd like to see, and we are looking at reagents, we are looking at processing times, we are looking at different steps to keep improving our overall recoveries and effectiveness. So on Slide 18, just in summary, we've -- this is a picture of our first nickel cobalt MHP product. And further down the line, we are recovering lithium carbonate, as I mentioned, targeting manganese, copper, graphite as well. We are very happy with our recovery rates, and we are continuing to improve upon them. And this basically validates a lot of the work that we've done previously on the bench testing in the lab. And I guess it's also the first recovery of nickel cobalt MHP via hydromet process in North America. So our next steps, we would like to continue the demonstration plant into August. We expect to be shipping our first product very shortly in Q2. We are working on an internal model and economics of a larger scale facility. And as I mentioned, we are continually refining the hydrometallurgical process to target improved recoveries and improved efficiencies. And there's ongoing discussions with the battery supply chain partners. Lots of interest in this, obviously, driven from the OEMs, from the top levels of the OEMs to recycle as much as they can from batteries they put in their vehicles. I will pass it over to Trent.
Trent Mell: Okay. Thanks for that, Mark. Yes, I just want to pause as well on the recycling. It's been rewarding and frankly, a lot of fun to watch the progress day by day. And so congrats to Mark, George and the team. We've got a lot of expertise, a lot of hydromet expertise in-house and backed by some outside experts as well. These are skills that are hard to come by in North America because this is a new industry, and we are ahead of the curve in many ways. It's one thing to develop a process in a lab and do bench scale test. But when you're in a live environment, like we are, to be able to run a ton of material at a time through a plant. You can learn a lot, you can adjust on the fly with a world-class lab, and we are. Things are getting better batch by batch. And we are tweaking, we are testing, and it's getting the attention of the industry. And so well done. And Mark touched on it, we aim to be very low carbon. I think we have the ability, much like our cobalt plant, to be the greenest, the lowest carbon emitter of the industry, and it's something that's going to be a continuous journey as we strive to continue to build our business. And so one of the things we will be working on is a desktop study. Now that we've got the data to validate 2 years plus of metallurgical work, try to provide some guidance to the market on what this business line could mean. I think we are starting to get an appreciation for that. It looks quite attractive. But once we get a little further into our pilot, we'd like to look at what a continuous operation might be 2,500 tonnes to start and then you would continue building circuits from there. So let me maybe just go back to a higher level on Slide 21 and talk about the outlook for next year and also just market developments. So industry developments and trends continue to provide significant tailwinds to us despite the tough capital markets decision that -- conditions rather and inflationary pressures. The macro outlook is very strong. The most notable point is that first bullet, the IRA, the Inflation Reduction Act, is a huge impetus for the onshoring of the supply chain, US$391 billion funds earmarked towards climate and energy change. And embedded within that, of course, is this $7,500 credit, vehicle credit for EV purchases to American consumers, which is premised on onshoring initiatives, whether it be free trade partners, in some instances or implementing facilities here in North America that's providing a lot of incentives to not just build the battery in the cell plants but a partner with companies like Electra to help make that onshoring a reality. And in our part of the supply chain, the refining of critical minerals, you've got 68% of nickel today being refined in China, 73% of cobalt, 93% of manganese. So our broader vision of being a battery materials refiner, not just a cobalt but at the cathode materials, in addition to recycling, really positions us well in the future. And, of course, its backed by the IRA is going to further bolster the EV sales penetration. Goldman Sachs recently projected EV sales of 73 million units by 2040. That's about a sevenfold increase from what we saw last year. And their forecast also predicts that, by 2030, about half of all sales will be electric. And then what that means for black mass, there is a lot of square out that gets generated when you're producing these vehicles. So it's not just the consumer electronics of today nor the old batteries from EVs coming off the road but just the manufacturing process generates a lot of black mass. A black mass is that material when you shred the battery. And that's a 25% growth per year by 2040, 20 million tonnes of material. So for us, the industry, the recycling is still small, but it's a real key focus for our partners, our battery and our OEM partners, given the volume of material and the importance of creating a close supply chain. And so I alluded to this proof partner build model that we are pursuing. Rather than build out the infrastructure, we wanted to focus on the process. A lot of companies do the shredding. Nobody yet is doing the refining, the hydromet refining on the continent that we are at scale on a commercial basis, and we wanted to focus that. On that and, with that, prove it out, partner with the industry and use their balance sheet, use their funds to help build dedicated circuits for them so that we can create that closed loop of battery materials. So this is kind of a validation set with more to follow in the quarters ahead. We are seeing evidence on the ground. BW announced just a massive -- I think it will be the largest battery plant in the continent that's going to be built in Southern Ontario, not far from our refinery. And you're seeing big investments overseas as well, Ford's decision form a syndicate to build a $4.5 billion nickel plant in Indonesia. I mean these are just two rather large examples of a worldwide trend that we are caught up in. And so with all that, commodity prices still do remain volatile. Cobalt prices are down about 35% since the start of the year. Nickel is down 25%. Now what that means for Electra, frankly, look, we are a margin-based business. We are taking material in at a market price into the cobalt plant, and we are selling it on the same basis with the margin. So we are relatively immune not entirely relatively immune from commodity price gyrations through the primary feed refining. Black mass is a little different because, of course, you are buying material but it's multi-commodity, and the margins are such that you can support that volatility. So it does provide a backdrop but not a significant one in terms of our business model and where we think we're going. Our near-term milestones on Slide 22, and then we will go to questions. As busy as 2022 was -- I think '23 will be just as active. Milestones, I'm going to start, of course, with that baseline -- rebaseline engineering report on our refinery. Inflation is as high as it's been since the '70s, and that was the environment we were faced with. So as Craig and Mark alluded to, we've got to do some work and understand what the supply chain delays and what the inflation means to our project. We are well advanced, and we are working hard to get that out to market soon. But yes, costs are going up, and we are delayed, but we will get there. And I want to thank everybody for their patience. Any major project I've been in this industry for 20 years, mining and processing. Risks and uncertainty are part of the project -- part of the project world. And it's about building the right team to make sure you can navigate that effectively. So when you add COVID, supply chain hyperinflation, it's been a tumultuous environment to be sure, but we are going to come back with more concrete plan that we look forward to sharing with you. So pending that, when we do, the funding -- of course, the markets are tough. We've got a number of streams that we are exploring. It's comprised of government industry partners, strategic investors and perhaps the equity markets as well with the debt we just did. So the funding package is multifaceted, and we will keep working on that and hope to bring news as developments evolve. Next, number two, on a real positive note, our first shipment of product out of that refinery. So this is the refinery. You saw the picture. It's a legacy refinery that once produced cobalt, nickel carbonate that we are expanding. And the inside of the refinery is what you see there. And so having recommissioned much of the old refinery, most of the old refinery, that's what is being used today, and that's the gem we've got for our black mass process. And so with the MHP and the lithium carbonate and a very high-quality graphite product that we are producing, you're going to start to see us shift some products, smaller quantities but very marketable and very sought after by the industry. So that will be a nice achievement for this plant. It's been dormant since 2015. Third bullet here, key equipment is going to continue to arrive at the refinery. Mark touched on that. And then, of course, the Bécancour prefeasibility study, we've been invited to build a second refinery, adjacent to Vale's nickel plant in Quebec, where POSCO GM, BASF are also setting up shop, and we plan to move ahead with the prefeasibility study later this year. Longer term, of course, we still have plans in Ontario that would encompass nickel refining manganese refining. That's not a today thing. But that's just the combination of our battery park vision. So with that, I want to thank you for your time, and let's -- maybe operator, if we could open it up for questions at this point. Thank you.
Operator: Our first question comes from Heiko Ihle of H.C. Wainwright. Please go ahead.
Heiko Ihle: Hey, thanks for taking my questions.
Trent Mell: Good morning, Heiko.
Heiko Ihle: Your capital spend, you said was higher than the $105 million expected. Can you push on some components that came to more expenses than you thought? I mean your words on this call just a little while ago at the very end reiterated that the high inflation environment, we find ourselves and it's not something you're immune to. And on that same token, you mentioned receipt of damaged equipment, which I'm sure they also managed to blame on COVID somehow. Can you provide some color on the last time any damaged stuff showed up? And just clarify that, that's not any costs that come out of your pocket, please?
Trent Mell: Yes. Thanks, Haiku. So let me start in reverse and then I will turn it to Craig maybe. So the damaged equipment was the following film of operators. So it's part of the crystallization circuit. I seem to recall 60 feet long or something. It was big. It's a rather large vessel that tilted over while in transport. And we talk about damaged equipment. That's the one piece. I don't know, it's about $0.5 million to acquire, but it was custom built for us, which was the challenge. So brought it to site, had it inspected. There is repairs that can be made in yes, an insurance claim. No, it's not as small one has been submitted, and we will let the insurance adjuster kind of figure that one out. So that would not be out of our pocket. But any time you incur delays like that, in a project, you're incurring costs, right? You've got standby costs, you've got rental equipment and trailers and people on site and all the admin that comes with it. So these delays have a knock-on effect. In terms of the inflation property, and part of it is delayed. Part of it is just what you see in the supply chain. Yes, I don't have a number. I'm not sure where we were going with that question, but insofar as the impact, it will be notable, right? It's not going to be a small increase in CapEx. We know that. But I'd be loath to try to guide you on where that could land. But did you have another question on place I missed, Heiko?
Heiko Ihle: No, that was it. I do have a completely unrelated question. That might be a correct question as well. I noticed that you -- the minimum cash balance after the convertible debt financing is down to $2 million. Are you really comfortable only having $2 million of cash on your balance sheet?
Craig Cunningham: Hi, Heiko. Thank you. I mean obviously, with a company with our current investments, requirements and spend profile, we wouldn't be comfortable with having only $2 million. It does, of course, leave us greater flexibility in terms of in a short period of time, bringing down that available cash while we are doing additional fundraising activities, it's more about having that as an option to us and not sort of having such a high amount of the US$7.5 million sitting there that we can't deploy or that basically shows as restricted cash.
Heiko Ihle: Got it. Okay, now that makes sense. Thanks for taking my questions.
Trent Mell: Thanks, Heiko.
Operator: Our next question comes from Matthew O'Keefe of Cantor Fitzgerald. Please go ahead.
Unidentified Analyst: Good morning. Thanks for taking my question. This is Kate Nakagawa on for Matthew O'Keefe. I'm just wondering if you could provide some further insight on to when you'll make a decision about starting a recycling plant and what costs or economic forecast you're seeing for that? Thank you.
Trent Mell: All right. I will start. Thanks, Kate. Good morning. I'll start and maybe hand it to Mark. So the demo plant will continue for the foreseeable future. It's been -- I dare say, it exceeded -- it has. It exceeded our expectations. When things come out better than bench scale on a live environment is always good news. We've had a lot of visitors up inspecting our work. We are sending sample material out to partners. So we are going to continue to push that. I think Craig, Mark and I, management team, we are of a view that we could produce -- I don't know if we want to call it scoping study detail, but a desktop review of CapEx and OpEx. But having just got through the year-end, maybe I will look to Craig in terms of what we think the timing is. Certainly, I think something we can do in Q2. But desktop, Craig, any thoughts?
Craig Cunningham: Yes, absolutely. Definitely, in Q2, we've done quite a bit of early-stage modeling. We are continuing to refine that model and bring it based on the real live data that we are running in our demonstration plan where the major advantages being that demonstration plan is of significant enough size to harvest that sort of data to really reinform our model. So I would expect within Q2, we would have a more interesting look in a more detailed look as to what that opportunity holds for us.
Trent Mell: Hey, Mark, maybe on the same vein, the opportunity, maybe talk about the equipment we've got on site, the existing infrastructure and how that might play out in a desktop review of a permanent installation.
Mark Trevisiol: I think that similar to what we've done to date, we will continue to utilize the majority of the equipment that's existing. We are currently processing in what we call a batch mode and the key to really getting production up and significant numbers, processing numbers is to go into a continuous mode. And we've started to review what we have at site and how we can refit what we have at site to go into a continuous operation. And that, again, will reutilize most of the stuff that we have there right now. There may be some key purchases that we will have to make at the higher rate. But again, the capital savings that we -- there's a significant capital savings that we are realizing by using the existing footprint and what's there right now. So that will continue in the future. And someone starting a continuous plant like ours from scratch would have huge infrastructure costs in the tens of millions of dollars. And further to that, that we don't talk about, and we should a lot is we have the permits. We have the permits in place to operate a facility like this. And sometimes that's -- it's 9/10 of the law to get those permits done. So we have a lot of stars aligned for us to go to the next phase here.
Trent Mell: And maybe I will just touch on the CapEx a little bit. So that slide that Mark showed on Slide 11, the June 21 picture, the legacy refinery that has been recommissioned is the totality of the footprint required for black mass. And so as we look to build out permanent line, it's going to be a question of how much of the existing equipment will not be required for the cobalt sulfate plant, how much do you want to cannibalize, if at all, how many new tanks you're going to bring in. But I hope the market will be pleasantly surprised by the CapEx number because we don't need to run power lines, gas lines, water lines, markets that we can have the permits are there. So we hope to provide some good news on that in the coming couple of months.
Unidentified Analyst: Okay, great. Thank you. Thatâs all for me.
Trent Mell: Thank you.
Operator: Our next question comes from Gordon Lawson of Paradigm Capital. Please go ahead.
Gordon Lawson: Hey, good morning, everyone. I'm more curious about the contracts. Can you provide a little more color on the black mass contract of Glencore in terms of how similar it is to an off take? And are you seeking similar turns with other suppliers? Or is there a wide variety on that front?
Trent Mell: Yes. So Michael Insulan, our VP Commercial, who is based at Luxembourg had negotiated the purchase of the feedstock, so the black mass in. And Gordon, you'll know this, but maybe the benefit of our listeners, when you think of battery recycling, the first step is to shred that battery, right, get a hold of the batteries, remove the charge casings for EVs and then you create this black powder or the black mass that contains all the elements. So we are buying that. We've got about 20 different partners, North America and around the world, that are interested in selling to us. We are favoring the higher quality feedstocks. And so when it comes into us, -- so Michael handles that. Mark did a lot of that. I think in bridge days at the Glencore smelter in Sudbury. So he's been a good help there, too. On the back end, look, we are just selling stuff on commercial terms. And so we put the MHP product out to tender under a short contract. And yes, Glencore was the preferred option. So it is a market-based contract. The next step, and we're doing this right now, samples of our lithium carbonate so that we can send this to a lithium converter for upgrade. And graphite, the same. The graphite product, we have a very high-quality. We don't have a dryer. We'd like to have the material driver, we will get there. That's just a little bit of money. But the tenders are out, everything is market based and rather short-term. We want to benefit from the ebbs and flows of the market. Mark, anything you would add to what I just said?
Mark Trevisiol: No, I think we are making a product on the nickel cobalt side. It's one of the highest grade cobalt products in the MHP world, if not the highest. So it's -- there's no problem with getting a customer to take that. And we continue, as trends saying to work with the other potential customers on the lithium on the graphite. But we don't see any issue in marketing those products going forward. They're very well in demand and pretty decent grades and purity with them.
Trent Mell: Yes, on the MHP, the market, Gordon, the reference price on fast markets for the quotation is a 35% nickel plus cobalt. And I would say we are well above that, and we are well within the impurity limits of what the market expects. So we are really pumped with the quality that we produced.
Gordon Lawson: Okay. Excellent. Thanks for that. And on the MHP product, who are your primary clients? And what is -- or how has your relationship with China Moly and LG Energy progressed in terms of the cobalt sulfate delivery timing?
Trent Mell: Mark, maybe I will let you talk to the MHP and I can talk to supply.
Mark Trevisiol: Yes. Well, I guess we touched on the contract that we have with Glencore on MHP. So currently, they'll be getting most of our product. And go ahead, Trent, with the second half of this question.
Trent Mell: Yes, so flipping now from recycling back to our cobalt circuit, our supply of primary feed for the cobalt plant comes from one of the four big mines in the DRC. One is, yes, one is one the ERG to Glencore. Those are the four mines that we are most comfortable from a transparency, sustainability perspective, RMI certification and the like. So we've got contracts with two of them. Both counterparties are eager to see us succeed. And with a delay in our start up, no impact on those contracts. We are basically just rolling the start dates forward with great support because like the downstream, there's a heavy reliance on China, and I think they'd like to see us succeed to provide a new market for their feed. And maybe I shouldn't be speaking for them, but that's my view. On the LG side, yes, we signed that the term sheet in partner. I've always positioned our relationship on the cobalt side is what I hope will be step one of a bigger relationship. So time will tell, but we continue to have regular dialogue with them, and they've been the most aggressive investor in the battery space in North America and, of course, the second largest battery maker after CATL. So it's a great relationship to have.
Gordon Lawson: Okay, great. Thanks very much, guys, and congratulations again.
Trent Mell: Thank you, .
Operator: That is all the time we have for questions today. And this concludes the question-and-answer session. I would like to turn the conference back over to Joe Racanelli for any closing remarks.
Joe Racanelli: everyone, for joining us today. And as noted, we do have a number of expected milestones in the coming weeks and months ahead, and we look forward to providing updates on our progress, specifically on the black mass as well as the refinery project. Thank you all.
Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
